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TMI Blog2020 (12) TMI 1147X X X X Extracts X X X X X X X X Extracts X X X X ..... subsequently confirmed by the ''Ld.CIT (A)''. The Ld.AR further submitted that the quantum addition with respect to which the penalty u/s.271(1)(c) of the Act was levied has already been deleted by this tribunal in ITA No. 961/Ahd/2016 vide order dated 26/10/2020. Accordingly, the Ld. AR before us submitted that the penalty levied u/s 271(1)(c) of the Act is not sustainable. 2.1 Thus the assessee pleaded before us to fix the case for early hearing out of turn. 2.2 The Ld. AR further contended that as the issue involved in the present case is in favour of the assessee, the matter can be heard on merit today only. 3. On the other hand the Ld. DR did not raise any objection if the matter is heard on merit out of the turn. 4. We have heard the rival contentions of both the parties and perused the materials available on record. Considering the fact that the issue involve in the impugned appeal is simple covered, we decided to proceed with the matter on merit after allowing the early petition filed by the assessee. Coming to the ITA NO.1856/Ahd/2019 for A.Y. 2012-13. The issue raised by the assessee is that the ''Ld.CIT (A)'' err ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns were carried out through the banking channel. What is the inference that flows from a cumulative consideration of all the aforesaid contending factsis that the assessee has discharged its onus imposed under Section 68 of the Act. The details filed by the assessee was not cross verified by the Revenue from the respective parties despite having the necessary details in its possession. Thus, we are of the view, Revenue cannot go to hold the addition under Section 68 of the Act in the given facts and circumstances. In holding so, we draw support and guidance from the judgment of Hon ble Gujarat High Court in the case of CIT Vs. Chanakya Developers reported in 43 taxmann.com 91 wherein it was held as under: 9. We are in complete agreement with CIT (A) and the Tribunal both, who have concurrently held that the onus which was required to be discharged on the part of the assessee respondent was duly done. Not only the identity of the persons concerned but also the PAN numbers were before the Assessing Officer. In the event of any further inquiry, it was open to the Assessing Officer to make inquiry under Section 133(6) of the Act. On its choosing not to exercise such powers, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see from those creditors as non-genuine and in order to sustain the addition the Revenue has to pursue the enquiry and to establish the lack of creditworthiness and mere non-compliance of summons issued by the Assessing Officer under Section 131, by the alleged creditors will not be sufficient to draw an adverse inference against the assessee. 16. From the above it is inferred that the principle, which is made applicable to addition under Section 68 of the Act is that the initial onus in on the assessee to discharge by producing the evidence which is required of him and once the assessee produces the evidence which is in his power and possession and which evidence prima facie proves the - (i) identity of the creditor; (ii) the capacity/creditworthiness of the creditor to advance the money; and (iii) the genuineness of the transaction, the onus shifts to the Assessing Officer to make further inquiries. The Assessing Officer cannot perfunctorily reject the evidence produced and has to state cogent reasons for such rejection. 17. Admittedly, the assessee filed part of the documents during assessment proceedings and part of the documents during appellate proceedings in suppor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icants. As far as construction of section 68 and to understand its meaning is concerned, there is no much difficulty. Difficulty arises when we apply the conditions formulated in this section on the given facts and circumstances. In other words, it has been propounded in various decisions that section 68 contemplates that there should be a credit of amounts in the books of an assessee maintained by the assessee, (b) such amount has to be a sum received during the previous year, (c) the assessee offers no explanation about the nature and source of such credit found in the books, or (d) the explanation offered by the assessee is not, in the opinion of the Assessing Officer, satisfactory. The Hon ble Delhi High Court in the case of CIT v. Novadaya Castles (P.) Ltd. 367 ITR 306 has considered a large number of decisions including the decision of Hon ble Supreme Court in the case of CIT Vs. Durga Prasad [1971] 82 ITR 540 (SC). According to the Hon ble Delhi High Court basically there are two sets of judgments. In one set of case, the assessee produced necessary documents/evidence to show and establish identity of the share-holder and bank account from which payment was made. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ificates by auditors etc. Unfortunately, the Assessing Officer chose to base himself merely on the general inference to be drawn from the reading of the investigation report and the statement of Mr. Mahesh Garg. To elevate the inference which can be drawn on the basis of reading of such material into judicial conclusions would be improper, more so when the assessee produced material. The least that the Assessing Officer ought to have done was to enquire into the matter by, if necessary, invoking his powers under section 131 summoning the share applicants or directors. No effort was made in that regard. In the absence of any such finding that the material disclosed was untrustworthy or lacked credibility the Assessing Officer merely concluded on the basis of enquiry report, which collected certain facts and the statements of Mr. Mahesh Garg that the income sought to be added fell within the description of section 68. Having regard to the entirety of facts and circumstances, the court is satisfied that the finding of the Tribunal in this case accords with the ratio of the decision of the Supreme Court in Lovely Exports (supra) 10. We also deem it appropriate to take note ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing confirmation, bank statements, copies of income-tax returns, PAN data then it would be construed that the assessee has discharged primary onus put upon it by virtue of section 68. It is the AO who has to carry out investigation and demonstrate that these materials are not sufficient for discharging the onus cast upon assessee by section 68. No such steps have been taken by the AO. He simply assumed that since the assessee was directed to produce applicants and it failed to produce, therefore, everything is to be construed as manipulated. The Hon ble Delhi High Court did not approve such steps at end of the assessee. We also make reference to the decision of the Hon ble Delhi High Court in the case of CIT Vs. Goel Sons Golden Estate Pvt. Ltd., rendered in Tax Appeal No.212 of 2012 dated 11.4.2012. It is also pertinent to observe that share applicants in the present case are individuals from surrounding areas. They are not shellcompanies from Kolkatta, who are indulged in providing accommodation entries. Taking into consideration all these facts, we are of the view that the AO failed to carry out any inquiry for falsifying evidence submitted by the assessee in support of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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